ABSTRACT

One argument about the future of the European Union is that as integration deepens so the power of nation-states will atrophy. To avoid any governance gap emerging, new democratic structures and policy functions will have to be established at the European level, and at the local or regional level. Thus as national sovereignty withers away, a new symbiosis emerges between more decentralised forms of political decision-making and new supranational political structures. Perhaps the most coherent articulation of this view is the idea of a ‘Europe of the Regions’. Paralleling this discussion is a debate in economic sociology that also suggests that the regional level is becoming an increasingly important strategic site for economic activity. In relation to labour market matters, two different arguments are normally presented in support of this view. The first is that the twin pressures of globalisation and productive decentralisation have weakened the labour market coordination capacities of nation-states. A frequent example given is the demise of corporatist bargaining. At the same time, marooning enterprises without extra-firm support structures in areas such as wage setting or training may be a recipe for new forms of economic distortions. As a result, regional institutions are required to help manage labour markets.